Global oil prices declined on Monday, reversing gains made last week, as concerns regarding the Chinese economy overshadowed OPEC+ production cuts and the continued reduction in the number of active oil and gas rigs in the United States for the seventh consecutive week. Brent crude fell by 68 cents to trade at $75.93 per barrel by 00:42 GMT, while U.S. West Texas Intermediate decreased by 59 cents to $71.19. Last week, Brent increased by 2.4%, and West Texas Intermediate rose by 2.3%.
Several major banks have lowered their GDP growth forecasts for China in 2023 after May data released last week indicated that the recovery from the COVID pandemic in the world's second-largest economy is facing hurdles. Sources told Reuters that China will introduce further stimulus support for its sluggish economy this year, but concerns regarding debt and capital flight will keep measures in place aimed at supporting weak demand in the consumer and private sectors.
Nevertheless, China's refinery consumption rose in May to the second-highest level on record, which helped bolster last week's gains. U.S. energy companies cut the number of operating oil and natural gas rigs for the seventh consecutive week, marking the first time since July 2020. The count of oil and gas rigs, an early indicator of future production, decreased by 8 to reach 687 rigs in the week ending June 16, the lowest level since April 2022.
